Retirement Flashcards
(61 cards)
Keogh Plans. Shortcut: Take the net schedule C income, then:
12.12% for 15% contribution for non-owner employees or
18.59% for 25% contribution for non-owner employees
NHCE vs. HCE ADP/ACP rules
Deferral 1% (×2) 2%
Deferral 2% (×2) 4%
Deferral 3% (+2) 5%
Deferral 4% (+2) 6%
What plan benefits young employees?
Money Purchase
simplest, most flexible plan.no deferrals
SEP
What plan has flexible yearly contributions and can be integrated with social securit
Profit-sharing plan.
VP of marketing earns $200k/yr.Sells paintings over $100k. CAn she fund a SEP?
Yes, limited to 25% of $100k less SS offset of $18,590 (18.59%)
Spouse dies. He had a qualified plan at work. Age 53, may retire early. What can she do with his money?
Since she isn’t certain abour retiring early, best to keep in 401k where you can get money at age 55. She can make a direct rollover into her qualified plan at work.
RMD slow down
If spouse is more than 10 years younger than you, you can use the joint and last survivor table (more favorable than uniform life exp table)
If you want to borrow money to purchase more investments and deduct loan interest you can pledge what as collateral?
1. muni bonds
2. ira
3. common stock
4. money market
Common stock. Ira would be disqualified, mni bond int deduction would be disallowed if pledged.
Coverdell phase outs
$190-$220k
Who do you not have to w/h FICA on?
Kid under 18 in UNincorporated business.
Does John have to w/h in his business? YES s-corp)
Does someone filing Schedule C have to? NO (sole prop/self emp)
What is current death benefit for SS
$255
Social security: spouse can get check if over age ____
60
Social security: Spouse of retired/disabled worker can qualify for Scoial Security payments if:
-age 62 or over or at any age if spouse has child under 16 or over 16 with disability
SS: Dependent benefits available when
Kid is under 19 and FT elem /sec school student
Age 18 with disability
SS: stay at home mom (didn’t work), how much benefit will she get?
1/2 of spouse. When he dies she gets stepped up to his amt.
What is haircut formula for taking SS early?
Number of months before FRA
PIA $ minus. ______________________________ times PIA $
180
What is temporary haircut?
For every $1 you make for each $3 of earned income over $59,520 until full retirement age is reached during 2024.
If they won’t reach full retirement during 2024 it’s deduct $1 for each $2 earned above $22,320.
Faster vesting schedules are …
2 to 6 year graded. *use for retaining EEs
3 year cliff
100% vested w/ 2 yr elig.
ALL DCs
Top heavy Dbs
Age and service for emp to particplate in qualifeid plan is
21 and one year of service.
*special provision allows up to 2 year service requirement but then EE is immediately vested.
Ratio test: plan must cover non highly comp EEs that is at least ____% of HCEs who are covered
70%
Slower vesting schedules are…
3 to 7 yr graded
5 year cliff
100% vested w/ 2 yr elig.
ADP/ACP testing
Short cut:
0 to 2% is “times 2”
2 to 8% is “plus 2”
Defined BENEFIT integration. - excess method…permittted disparity is lesser of base benefit or ____
26.25%
Base 30%. + Perm Disp 26.25% = 56.25
Base 20%. + Perm Disp 20% = 40%
